1. Field of the Invention
The present invention generally relates to an electronic communication network having a plurality of terminals in which a user may acquire electronic money, spend it or transfer it to other users of the network, and redeem the electronic money by transferring it to a regular bank account and, more particularly, to a mechanism that assures that the electronic money is properly and securely circulated.
2. Background Description
Commercial Internet payment systems are now being developed. Just as cash and credit exist in conventional business transactions, both exist in the digital world as well. Digital cash is the digital equivalent of a cashier's check issued and signed by a bank or other institution with its name, unique identification (ID) and amount of money represented. Users can buy these notes or, as used in this description, coins from a bank and then redeem them later for real cash, typically as a deposit to a bank account. Although users can make digital copies of such notes, a bank redeems each note number only once.
Several examples of Internet payment systems already exist. Many of these systems are account-based; that is, both the customer and the merchant have accounts with the system. Thus, there is no provision for anonymity. Privacy is an important issue which is only partially addressed in some systems. Security is critical to all Internet payment systems, and the encryption techniques adopted vary widely.
While not an exhaustive list, examples of Internet payment systems include DigiCash of Amsterdam, The Netherlands, CyberCash of Reston, Va., and systems proposed by various banks including Citibank of New York, N.Y. DigiCash provides a close analogue to real cash in the sense of providing unconditional anonymity for the user through a novel cryptographic technique known as "blind signatures" designed by the founder of the company, David Chaum. CyberCash offers both a credit card and a money payment service. Transactions using CyberCash are passed directly to a real bank. The Citibank system is an off-line system. All participants (banks and users) have so-called "money modules" which are assumed to be secure, as is the communication between them. However, this approach has scalability and security problems.